Copper miner 29Metals hits up investors for $150m for new Golden Grove production

29Metals is tapping into higher copper prices by raising $150 million in new equity from investors to advance its mines in WA and Queensland.

The one-for-3.66 a share rights issue is pitched at 40¢ a share, a 35.5 per cent discount to Monday’s closing price, and is fully underwritten by Macquarie.

Major shareholders BUMA and AustralianSuper will take up their full combined entitlement of $56m.

However, 29Metals’ biggest shareholder, resources private equity group EMR Capital, won’t buy any of the new shares, with 29Metals saying the investor is “not in a position to participate”. Its 23 per cent holding will subsequently dilute to about 18 per cent.

Some $90m of the proceeds after costs will be applied to support the miner’s high-grade Xantho Extended zinc zone at the underground Golden Grove base metals mine in the Mid-West where mining has suspended because of unstable ground.

Last valued at $850m, 29Metals is shoring up the Xantho Extended decline and production stopes with the aim of resuming mining in April.

“In the meantime, this equity raising is expected to allow us to maintain our commitments to our strategic growth objectives to accelerate value realisation across the portfolio,” chief executive James Palmer said.

The Melbourne-based group will also deploy the raising proceeds into its new Gossan Valley copper expansion at Golden Grover, which is due to augment the mine’s copper production by the end of the year, a feasibility study to restart its suspended Capricorn Copper mine in Queensland and exploration drilling.

Despite its difficulties at Golden Grove and Capricorn Copper, shares in 29Metals have ridden higher copper prices, doubling over the past six months.

However, the stock remains well off its float issue price of $2 a share in mid-2021, with the suspension of Capricorn Copper in early 2024 delivering a particularly hard blow.